Small and microenterprises cannot grow because they lack access to finance. Microfinance institutions and commercial banks (together, “financial institutions” or “FIs”) that serve small and growing businesses in emerging economies are a critical part of the economic development solution and a means for people in poverty and women worldwide to improve their circumstances and provide more for their children. But they, too, are constrained because of their lack of ability to attract, develop and retain the right people in the right positions.

Abstract

In-depth research and global experience in the field with MFIs and banks confirms the significant impact that effective and strategic management of people can have on the performance of financial institutions, and through their success, on initiatives to support economic development and poverty alleviation.

The Small Business Banking Network (SBBN) conducted research to explore the impact that Strategic Human Capital Management (SHCM) and capacity building have on business performance, identified human capital factors that contribute most significantly to performance, developed metrics for HCM performance in financial institutions, and developed tools and approaches to integrate HCM into the business strategy of an MFI or bank in emerging economies. Our research and work in the field lead us to make a critical “call to leadership,” a call for strong, sustained industry leadership to bring about the levels of change that stakeholders and practitioners believe are necessary at the industry and institutional levels to ensure that financial institutions in emerging economies targeting underserved entrepreneurs and communities, not only survive but thrive. We believe in nothing less than a call for fundamental transformation rooted in a multi-pronged campaign to champion greater awareness of strategic human capital management, to create industry- and region-specific proofs of concept, to develop and disseminate HCM benchmarks, to expand capacity building for financial institutions and to support local resources in the service of business success and ultimately economic and social enrichment.

About the AuthorAcknowledgementsAbstractIntroductionImpact of Strategic Human Capital ManagementSetting Up Human Capital Management SystemsThe Contributions of Strategic Human Capital ManagementEssential Components of SHCMStrategic Integration of HCMHow HCM Becomes Integrated with Business StrategyHow Strategy Becomes Integrated Into the HCM SystemsCritical HCM Systems Requiring a Strategic PerspectiveThe Roles of Executives, HR Leaders and Board Members in IntegratingHCM and Business StrategyStrengthening HCM Capabilities in Financial Institutions & DeepeningIntegration with StrategyConclusions About What is NeededSteps for Moving Forward

Small Business Banking Network (SBBN), a CapitalPlus Exchange initiative, is a global industry-building initiative and community platform that exists to expand the capacity, competency and willingness of financial institutions to serve small and growing businesses – the engine of income and job creation in developing economies.

Prinny Anderson is a globally recognized human capital educator, coach, author and consultant and a principal of Design for Learning & Change in Durham, North Carolina, USA. Prinny is the lead human capital professional for SBBN. Her projects through SBBN and others in the industry range from in-depth human capital advisory engagements to workshops for HR teams, management training, and intensive preparation of younger professionals to provide strategic human capital management support to financial institutions.